FairTradia: The Land Where “Price” Does Not Equal “Profit”

Mmmm…. CostCo. Have you ever been at the CostCo warehouse stores? They are rather big here in California, and my, what a treat. Everything is stacked high, large quantities, low prices-per-piece, goods for all kinds of imaginable purposes and plenty of free food samples on a weekend. I was fortunate enough to go there to purchase, among other things, my coffee supply. And I am glad at what I saw.

This logo tells you who offers a sustainable return price to the people who produce the item you buy.

There are three major options for coffee there: Jose’s, Starbucks’, and Kirkland (which is CostCo’s generic brand name).  Starbucks was obviously the most expensive. So my choice was between the other two. And this is what I noticed:

Jose’s costs less, at ~ $7 for 2.5 lb. But Kirkland is “Fair Trade Certified,” and goes for ~ $10 for 2lb. Now, some people like to capitalize on a lower price; definitely understandable.  I have even seen companies that capitalize on the “Fair Trade” label, making more of a profit than they would have otherwise.  And some of my friends are very aware of companies that do that, because it appears hypocritical or misleading to them. I am not anti-capitalist, and I am definitely not anti-savings. What I can tell you is this: I chose the Fair Trade label. And I don’t think Kirkland is making more of a profit; I think the non-Fair-Trade company Jose’s is making more of a profit.

Why do I think this? Consider for a moment the very concept of “Fair Trade”: indigenous groups produce a crop (most of the time in the most ecological manner, simply by-default), and need a higher price so that they can sustain the land and their families, continuing to use the right methods. Naturally, the other methods are cheaper; that’s why they are so prevalent, but also why ecological damage and global poverty pervades most of the world’s “underdeveloped” cultures. That means that, by-default, because Fair Trade requires poverty and ecology to be addressed responsibly, the Fair Trade products will cost more. Jose’s probably makes, say, $4-5 profit on every $7 bag that you buy. Kirkland probably makes that same profit on every $10 bag that you buy, because as a company they need to make at least the same profit on like items. But that means, all other things being equal, you hand the non-Fair-Trade company more profit, even though you spend less per-item. In other words, the increased price on Fair-Trade items, as some are worried about, more often goes to the very cultures that need the money to eradicate their poverty line, not to the companies that employ Fair Trade.

Something to consider, and I know it takes time and grace to do this (God knows I fail at it regularly, but we can still try): The next time you need a “pick-me-up,” perhaps it’s best to do what offers a “pick-me-up” to the poor, too.

Michael+

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3 thoughts on “FairTradia: The Land Where “Price” Does Not Equal “Profit”

    1. Dude; give me your email address. We need to connect! I’m with a Covenant church in Redlands right now, but I have a lot of Anabaptist sympathies through my seminary (Fuller), and I think we’d get along really well.

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